China retaliates to the US’s retaliation to China’s retaliation to US imposed trade tariffs

In early March, US President Donald Trump announced a package of section 232 tariffs on raw materials goods such as aluminum and steel in order to punish China for its “aggressive” trade policies, which allegedly compromise American national security. With the threat of these tariffs on the horizon, China prepared its own tit-for-tat tariff measures in response to Trump’s imposition, which went live once their American counterparts saw implementation, three weeks into the month.

China’s hope was that the US would not follow through on pushing further trade obstacles given that, rather than obtaining its desired effect, the change of Chinese trade policies to better favour American business, China would merely effect its own packages in proportional response to America’s, in effect initializing a trade spat between the two countries

However, once China’s retaliatory tariff measures went into effect, America immediately set about devising yet another round of trade tariffs, this time targeting over 1,300 tariff lines of products, manufactured in China and imported into the US, to be subject to a 25% tariff. The motive behind it remains punitive in nature for China’s alleged theft of American intellectual property, which is said to be somewhere in excess of $50 billion, as well as the fact that, instead of capitulating to America’s demands, China chose to respond likewise.

While China has already issued one such retaliatory tariff measure against the US, it has publicly declared that it will respond in kind if the US imposes further sanctions, which the US has now delivered as of Tuesday afternoon.

With America’s new tariff response on the table, China is now following through on its warnings that it would retaliate in like manner with a 25% tariff on 106 American products in 14 areas, which include chemicals, autos, and soybeans. Mirroring the amount of business that America is impacting with its measures, China’s response will likewise impact approximately $50 billion of US imports. CGTN reports:

China will raise 25 percent tariffs on 106 US products in 14 areas including soybeans, automobiles, and chemicals, Chinese Ministry of Finance announced on Wednesday, saying the effective date of the new tariffs will depend on when the US imposes tariffs on Chinese products.

The tariffs decision comes as a countermeasure to the US’ proposed tariffs increases on Chinese imports. The US released overnight a list where about 50 billion US dollars of 1,333 Chinese products will be subject to additional 25 percent tariffs.

“China has just announced its tariffs list involving nearly 50 billion US dollars of US imports. I have to say that China was forced to take the countermeasure and it has reacted with restraint,” Chinese Vice Commerce Minister Wang Shouwen told a press briefing.

“China does not want a trade war which could only hurt the interests of both sides, and the prospects of the world economy,” Chinese Vice Finance Minister Zhu Guangyao said at the press briefing. He noted, “Mutual beneficiary is the essence of China-US economic relations.”

China is fighting back reluctantly.

The US’ proposed list targeted at Chinese high-tech products including software, patents and other technology. It was to allegedly bash China’s so-called coercive technology transfer practices, and “Made in China 2025.”

As China becomes a technologically pre-eminent economy, it is giving US policymakers a lot of pressure, analysts said.

“The ‘Made in China 2025’ initiative is transparent, open and non-discriminatory. We believe it complies with China’s obligations under the WTO framework. We hope to solve the disputes under the international rules of WTO,” said Wang.

“The US action is harmful to China’s interests and economic safety. It threatens the recovery and stability of the global economy,” said Wang.

“China does not fear a trade war. If the US insists on fighting a trade war, China will go with it. If the US is willing to negotiate, the door is open,” said Wang.

America has issued its tariffs packages to alleviate harm to America’s interests and economy, and China has responded to America’s measures as a threat to Chinese interests and economy, with such back and forth retaliations continuing to escalate.

The US is beginning to fear China’s manufacturing and technological might, and therefore is aiming straight at it, right where they believe that it will do the most damage: technology, including software, robotics, AI, patents, etc., in a move to weaken China’s “Made in China 2025” initiative.

The new Chinese tariff measures will take effect as soon as America’s new batch of tariffs go live, which is slated to follow the 60 input period allowed for public feedback. Meanwhile, with each unveiling of retaliatory measures, the markets are taking a dip, and both investor and consumer confidence is caught in the middle of what is more and more resembling a legitimate trade war between two of the world’s largest economies.